Facebook Shares Slump 20% after Growth Warning

Facebook shares opened sharply lower on Thursday, after the social media network warned investors of slowing revenue gains and increased spending.

The firm’s shares opened 20% down, a drop that wiped more than $100bn (£76bn) off Facebook’s market value.

The fall also dragged down the tech-rich Nasdaq share index, which was almost 1% lower.

Facebook’s forecast came as the firm faces a backlash over its handling of fake news and user data.

The company said it expected to boost spending by 50% or more, as it tries to improve the way it monitors content, tracks advertisers and treats user data – areas where it has faced regulator scrutiny.

The firm also warned investors that revenue growth would be hurt as people make use of new options to limit advertising and less profitable overseas markets drive growth.

Facebook, which also owns Instagram and WhatsApp, said its margins would shrink to the mid-30% range, from about 44% in the most recent quarter.